Two months after India’s largest exchange, the National Stock Exchange, filed its draft papers for listing, it has moved another step forward towards clearing up the governance issue that had been a point of concern – the Securities and Exchange Board of India (SEBI) has given in-principle approval to settle NSE’s long-running co-location and dark fibre cases on July 30.
Co-Location & Dark Fibre overhang cleared
The move removes a major regulatory overhang for the country’s largest stock exchange, which is preparing for a long-awaited initial public offering.
According to an NSE notice, SEBI has asked NSE to pay the remaining Rs 714.74 crore to complete the settlement, taking the total settlement amount to Rs 1,491.21 crore. NSE had already deposited Rs 776.47 crore, which will be adjusted against the final demand.
“We wish to inform that the Company has received a communication dated July 30, 2026, from the SEBI regarding the in-principle acceptance of the Revised Settlement Terms (RST) proposed by the Company,” read the notice.
For NSE, the settlement is more than just a legal closure, a key step in clearing up legacy issues before a potential listing.
The cases date back to concerns around access and speed in trading systems. Co-location allowed brokers to place servers inside NSE’s data centre for faster market data access. Dark fibre allegations also raised questions about whether some participants received an unfair connectivity advantage.
Those issues have weighed on NSE’s IPO ambitions. A successful settlement could improve sentiment around the exchange’s governance and reduce one of the biggest uncertainties facing its IPO plans. This matters because NSE has been one of India’s most closely watched potential IPOs.
NSE IPO: Previously filed settlement application
NSE first filed its settlement application in June 2025 and later revised it in March 2026. The exchange has also said it has already made provisions for the full amount in its financial statements.
The latest development does not mean the IPO is imminent. But it does address another uncertainty with regard to the NSE IPO. A cleaner regulatory backdrop may help NSE move closer to the market after years of delays, legal disputes and repeated investor questions.
A cleaner regulatory environment might help NSE come closer to entering the market after years of delays, legal issues, and ongoing questions from investors.
NSE IPO: What was the co-location case?
A whistleblower raised the issue in 2015 that NSE offered a co-location facility where brokers could place their servers inside, or very close to, the exchange’s data centre. That reduced latency. In fast markets, even a tiny timing edge can matter a lot.
The controversy was that a few brokers may have received preferential access to the system. SEBI later investigated, and the matter became one of the biggest governance scandals around NSE.
NSE IPO
Meanwhile, all eyes are on the SEBI approval for the NSE IPO. The company filed its DRHP with SEBI on June 17. While most market participants have cheered the issue, the street is awaiting the final pricing and issue size details.